All there is to know about Self Assessment tax return

Filling in an HMRC Self Assessment tax return can be quite intimidating if you have not outsourced bookkeeping services like Outlooks. So, to provide an insight into what the process requires, we have given below all the details that Self Assessment entails.

Who is eligible?

A person is eligible for Self Assessment if he/she

  • Earned income is over £1,000
  • Earned income from the rented out property is more than £2,500
  • Earned untaxed income (tips and commissions) is more than £2,500
  • Earned income from investments and savings is over £10,000
  • Needs to pay Capital Gains Tax on profits from selling out second home or shares
  • Is a director of a company
  • Has income more than £50,000 and is claiming Child Benefit
  • Earns income from abroad or lives abroad and has income in the UK.
  • Has taxable income more than £100,000
  • Earned more than over £46,351 in the tax year 2018/19 and £50,001 in the tax year 2019/20
  • Is a trustee or has a registered pension scheme
  • Has state pension more than the personal allowance
  • Has received a P800 from HMRC stating that not enough tax was paid the previous year.

How is Self Assessment tax return registered?

People who have never submitted a return need to register for Self Assessment first. There are different criteria for people who are self-employed, who need to declare their income and who are in a partnership. Once this is done, you will be given your Unique Taxpayer Reference (UTR).

To fill the form online, set up a Government Gateway account by following the instruction given in our UTR letter. After that, you will receive a code that will complete the set up of your account.

For people who have submitted a tax return before will require their old UTR to set up the account.

What are the deadlines?

The tax return is paid not for calendar years but tax year. It is done in arrears. New registrations are done by the first week of October. If filing paper tax return, submit the return by midnight 31 October but if filing online, submit the return by midnight 31 January.  Any owed tax must be paid by midnight 31 January.

Failure to meet any of these conditions will result in a penalty.

What is to be mentioned in the Self Assessment tax return?

The following points need to be mentioned while filing a Self Assessment tax return:

  • 10-digit Unique Taxpayer Reference (UTR)
  • National Insurance number
  • Details of untaxed income of the tax year (this also include dividends, interest on shares, and income earned from self-employment)
  • Any record of self-employment expenses

It should be noted that any contributions or donations made to charity or pensions will act as a tax relief so, it is ideal to also mention that information to seek probable benefit. Other information that needs to be presented while filing the tax return includes records like P60 that show the amount of income that you have already paid tax on.

It is always ideal to study the help sheets and guidelines relating to HMRC to know more about how you can make the best out of tax return and are always informed.